The State Of Programmatic Media

"Marketer's Note" is a weekly column informing marketers about the rapidly evolving, digital marketing technology ecosystem. It is written by Joanna O'Connell, Director of Research, AdExchanger Research.

On Monday I presented the findings of our recent “State of Programmatic Media” survey at our bi-annual Programmatic I/O conference. For background, we fielded a survey over a several week period in Q1, with a goal of gathering data from the full range of players in the programmatic ecosystem: marketers, agencies, publishers and technology players. Response was strong, with over 400 completed surveys from nearly 50 marketers, nearly 100 agencies, another 100 publishers, and more than 150 tech vendors.

For those who weren't able to join us in person, I thought I’d share one or two interesting tidbits from my research.

First, I’ll state the obvious, which, although we in the industry all love to crow about, I found in fact to be true: big marketers are embracing programmatic, and are big spenders, bigger in fact than you may think. Specifically, we found that more than 60% of this group are managing 20% or more of their digital media budget programmatically this year. And they are bullish on near term future investment: in the next twelve months, the majority (66%) plan on spending at least 40% of their digital media budget programmatically, with a whopping 25% planning on managing at least 80% of their digital budget this way. Big numbers. Exciting stuff.

Second, there remains strong agreement on some critical challenges programmatic still faces: chief among them, a lack of marketing understanding as to what programmatic is and how it works; too much complexity; and inventory quality issues. For marketers, specifically, it’s clear that inventory quality is a concern. But also notable - and certainly worth paying attention to if you’re a publisher - nearly 20% of these marketers cite publisher reticence to make inventory available programmatically as the biggest challenge programmatic faces.

These are just a couple nuggets. I found so many more in this research, many of which I am excited to share. (Many, but not all! There just isn’t time!) As a next step, I’ll be taking all my findings and producing a full research report which tells the story of the current state of programmatic media, which will be downloadable on the AdExchanger research site (coming soon!) beginning in mid to late April.

3 Comments

Joanna, it's interesting that the majority of publishers cite the inventory availability from publishers being a huge problem for the industry. If anything I'd suggest that it's the technology that is currently limiting the amount of spend that can come through (especially on PMP's). Responses to bid requests on deals ids continue to remain low. I'm not sure if there's a specific reason for this, but I am hoping that with "programmatic direct" we'll see things improve.

Me too, Adam! And I think you're right, technology is a big part of this. Not necessarily the technology "not working" per se, but the number of technologies participating (there are a lot, if we're thinking about buy side ad servers, sell side ad servers, DSPs, SSPs, exchanges...) and the lack of standardization and transparency across them. I've heard this from trading desk folks and DSPs alike recently - essentially, we don't know what we don't know, so how can we get better? It may be mostly an information sharing problem where the technologies at play are concerned, not any one entity's fault exactly. That isn't to say that there aren't also big business and organizational challenges at play too - there definitely are.

For programmatic direct and PMP to work you indeed need the first party ad server to be involved.

Lack of technological standard is definitely an issue, but I'd rather point out the business challenges you've just mentioned. Publishers need control (technology), but also revenue transparency to trade their best inventory in a programmatic way.

They definitely lack the second one. The marketplace is currently being driven by middlemen and this creates an imbalance of the value chain to the disadvantage of the publishers.